Office occupancies rise on government privatization

Though the privatization of several state government functions has negatively impacted recent jobs reports in the Capital Region, it has also led to an increase in office rentals, says Branon Pesnell, an agent with Beau Box Commercial Real Estate. “We’re seeing a tremendous amount of activity from state privatization, and we’re leasing a lot of big blocks of vacant spaces that were a concern earlier this year,” Pesnell says. “This has all been in the past 30 days.” Most recently, AmeriHealth Mercy has filled 30,000 square feet of space at Perkins Rowe, and Centene Corporation has leased 34,000 square feet at United Plaza Office Park off Essen Lane. As many as three deals of similar size are also in the works and close to being finalized, Pesnell says. According to real estate research firm Reis Inc., U.S. office inventory increased by 6.2 million square feet in the third quarter, while the occupancy rate increased by just 0.1% to 82.6%. The local office market is viewed as being in better shape than the nation at large. Read the rest of this story and the full Real Estate Weekly newsletter here.